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PE HUB Wire Highlights, 11.21.18

Investcorp joins hunt to buy GP minority stakes; Ankerbrandt leaves Carlyle after 11 yrs for Compass; Which emerging manager raised more than $100 mln?

Happy pre-Thanksgiving, everyone! I plan not to be at the supermarket tonight. Instead, I’m going this afternoon. Also, we will not be publishing tomorrow (because we’ll all be eating). Chris will be back on Friday.

There’s still lots of buzz surrounding KKR and Bain Capital’s $20 million fundto help former employees of Toys “R” Us. I’m glad that KKR and Bain are doing something but this still seems pretty chintzy to me. The $20 million falls far short of the $75 million the workers were seeking. According to my calculations ($20 million divided by 31,000 employees), this works out to about $645 per worker, which could cover some gifts this Xmas.

Vornado Realty Trust, which also took part in the infamous 2005 buyout with Bain and KKR, is not part of the $20 million fund and has refused to answer workers’ emails, the Financial Times has reported. Two hedge funds that were key Toys “R” Us creditors have also refused to join the discussions, the FT said. Bah, humbug, I guess. What do you think, Hubsters? Is $20 million enough? If not, what is fair? Do the firms have any obligation at all? Email your thoughts to me at lbeltran@buyoutsinsider.com

We have another entrant in the race to buy GP minority stakesInvestcorpsaid yesterday it has launched Strategic Capital Partners, to acquire minority equity investments in midsized alternative-asset managers. Anthony Maniscalco, the former co-head of Credit Suisse’s Anteil Capital Partnersbusiness, is leading Strategic Capital.

Strategic Capital is seeking to buy chunks of PE firms “below 25 percent,” said Maniscalco in an emailed response to questions. It’s not clear where Investcorp is getting the capital for these deals. Rather, I asked and they declined comment.

I’m still hearing from LPs who aren’t so jazzed about these minority deals. I asked Investcorp the rationale for such transactions. Maniscalco said: “Although there is selective push back from LPs, the actual experience is not for LPs to take any negative action following a sale. We believe if structured correctly, these transactions can create more alignment between the GP and its LPs. We are not seeking to make investments where critical investment professionals take money off the table.”

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